House of Commons Hansard #86 of the 41st Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was chair.
Joe Oliver Conservative Eglinton—Lawrence, ON
Mr. Chair, our government has a consumer first policy and we have pursued that in a number of ways. However, before I get into that, I just wanted to complete a couple of comments I wanted to make with respect to free trade.
The Assistant Deputy Chair Conservative Bruce Stanton
Order, please. Unfortunately, we have run out of time for that. We had time for a brief response. Perhaps the minister will have an opportunity, though, in responses to other questions.
We are moving on to the next round of debate. The hon. member for Québec.
Annick Papillon NDP Québec, QC
Mr. Chair, to begin, I would like to say that I will be sharing my time with the hon. member for Sudbury.
Because the Minister of Finance is also the minister for Toronto, my colleague from Parkdale—High Park asked him if he knew how much gridlock is costing the City of Toronto. We know it is a problem.
However, the minister did not answer the question. In 2013, the C.D. Howe Institute estimated that traffic gridlock costs $11 billion a year. That is absolutely incredible. Since the Minister of Finance seems to be suggesting that he is more familiar with consumer affairs, let us see if that is the case.
My question is simple. Can the minister tell us how much Canadians are paying to withdraw their own money from ATMs each year?
Joe Oliver Conservative Eglinton—Lawrence, ON
Mr. Chair, Canadian consumers deserve access to credit on fair and transparent terms.
According to the Financial Consumer Agency of Canada, Canadians have more low-cost or no-cost banking options than ever before. As was stated in the throne speech, the government will take additional measures to extend no-cost banking options to all Canadians.
Annick Papillon NDP Québec, QC
Mr. Chair, my question required only a single-sentence answer. Canadians pay $420 million a year to withdraw their own money from ATMs. It is simple.
In 2011, a U.S. senate committee studied the issue of transaction fees in the financial industry. This report is better known as the Durbin report.
Is the minister familiar with this report?
Joe Oliver Conservative Eglinton—Lawrence, ON
Mr. Chair, in our plan we reduced cheque hold periods and required banks to provide immediate access to the first $100 deposited by cheque.
Furthermore, we more than doubled the maximum penalty—from $200,000 to $0.5 million—for financial institutions that violate the consumer protection provisions. We banned negative option billing for financial products and made mortgage insurance more transparent and easy to understand, by strengthening disclosure and other measures.
Annick Papillon NDP Québec, QC
Mr. Chair, my question was simple. I wanted to know whether the Minister of Finance of Canada was familiar with the famous Durbin report, but I guess not, since he is avoiding the question. I suppose that means he does not know the answer.
Does the minister know the estimated administrative cost of an ATM transaction? In fact, what Canadians do is quite simple: they go to an ATM to conduct a transaction. All I want to know is the cost. I want a single figure. What is the cost of one transaction?
Joe Oliver Conservative Eglinton—Lawrence, ON
Mr. Chair, as everyone knows, if you withdraw money from your own bank, there are no fees.
Annick Papillon NDP Québec, QC
Mr. Chair, according to the famous Durbin report, it costs 36¢ to withdraw that money. The Minister of Finance may have confused this American report with withdrawing money from an ATM in the U.K.
Could the minister tell us what percentage of ATM withdrawals are free in the U.K.? The minister seems to believe that it is free. However, everyone who withdraws money tells me that they have to pay a lot of fees for that.
What percentage of ATM withdrawals are free in the U.K.?
Joe Oliver Conservative Eglinton—Lawrence, ON
Mr. Chair, we live in Canada, not the United Kingdom. If the hon. member wants that information, we can do the research and give her an answer.
Annick Papillon NDP Québec, QC
Mr. Chair, in Canada, people pay $420 million to withdraw their own money from ATMs. Contrary to what the minister says, it is not free. In the United Kingdom, however, the truth is that 97% of ATMs are free. That is not the case in Canada.
Credit card debt is a big problem in Canada. Can the minister tell us the aggregate unpaid balance that Canadians are carrying on their Visas and MasterCards?
Joe Oliver Conservative Eglinton—Lawrence, ON
Mr. Chair, in 2010, we introduced new consumer protection rules. We mandated a minimum 21-day interest-free grace period on all credit card purchases. If a cardholder pays less than the full balance owing, card issuers must allocate payments to the balance with the highest interest rate first or distribute the payments based on the relative proportion of each. In addition, the cardholder's consent is required for credit limit increases.
Annick Papillon NDP Québec, QC
Mr. Chair, I will be brief. All I am asking for is a yes, a no or a figure. It is no more complicated than that. The minister is just going on and on.
The answer is simple. According to the Coalition des associations de consommateurs du Québec the total was $43 billion in 1991, $139 billion in 2001 and reached $332 billion in 2011. When we consult these people, they give us the figures. The minister could have replied in 10 seconds, but he did not.
I will give him one last chance. Canadian retailers have to pay credit card transaction fees that are among the highest in the world. Can the minister give us the annual cost, for Canadian businesses, of the transaction fees for credit cards?
I do not want a long speech. I want the answer to be a number. I am relying on the knowledge of the Minister of Finance of Canada.
Joe Oliver Conservative Eglinton—Lawrence, ON
Mr. Chair, she is asking the Minister of Finance questions that have very detailed answers. I can tell her about the government's policy.
The government is concerned about high credit card acceptance costs. We heard the concerns of small businesses in Canada. That is why we created a code of conduct. It has been applauded by consumers and industry groups, especially small businesses. We continually monitor compliance with the rules, and we work with small businesses and consumers to ensure that these two groups are heard.
Glenn Thibeault NDP Sudbury, ON
Mr. Chair, the minister is touting a voluntary code that is actually toothless and has done nothing, because we just heard him admit that the rates are still going up.
I would like to hear from the minister why it is that they continue to do a lot of talking about protecting small businesses and making sure that they are going to do something about merchant fees but have refused to act, except to put in a voluntary code that the small business communities across the country are still saying is toothless, does nothing to protect them, and is costing them $4.2 billion a year. I would like to hear the minister's response to that.
Joe Oliver Conservative Eglinton—Lawrence, ON
Mr. Chair, as I have said, Canadian consumers deserve access to credit on fair and transparent terms. That is why we have taken action to protect Canadians using credit cards by strengthening the position of credit card users by imposing mandatory 21-day interest-free grace periods on credit cards, banning unsolicited credit card checks, and requiring consent for credit limit increases. We are better protecting Canadians using pre-paid credit cards with increased transparency and new consumer protection rules and are banning fees for the first year.
Our government also takes the issue of fraud and consumer protection very seriously.
Glenn Thibeault NDP Sudbury, ON
Mr. Chair, let me explain to the minister that his answer to that was on the consumer side. What we were talking about a minute ago was the small business side. The minister really has to get an understanding of which side of the credit card issue we are talking about right now, because the Competition Tribunal said in a recent decision that the credit card processing fees and the practices of Visa and MasterCard are having an adverse effect on competition in the market. They punted the issue back to Parliament for action, so I would like to know if the minister agrees with the Competition Tribunal that the practices of the credit card companies are anti-competitive. I would like to hear an answer on the small business side this time.
Joe Oliver Conservative Eglinton—Lawrence, ON
Mr. Chair, the small business sector is extraordinarily important because it generates more employment than any other sector.
We are working with the Canadian Federation of Independent Business to look at these important issues. We have made regulations on credit agreements, including lines of credit and credit cards, and these rules limit business practices that are not beneficial to consumers. They require provision of clear and timely information to Canadians about credit products.
We are working with small business to make sure that the impact on small business is appropriate with the competitive circumstances.
Glenn Thibeault NDP Sudbury, ON
Mr. Chair, the minister's initial response was that small businesses are important to the government. Why, then, did it cut the small business hiring tax credit?
Joe Oliver Conservative Eglinton—Lawrence, ON
Mr. Chair, we have reduced the tax on small business to 11% and we have taken other measures that help small business, which is why the Canadian Federation of Independent Business is so supportive of the actions of our government. Keeping taxes low is precisely what small businesses need. Avoiding increases in EI rates is another important factor in protecting jobs across the country.
Glenn Thibeault NDP Sudbury, ON
Mr. Chair, I doubt that 60,000 businesses that just lost their opportunity to apply for this tax credit that used it before would agree with the minister.
In terms of lost revenue, could the minister tell us what the estimated annual cost of the hiring credit for small businesses was?
Joe Oliver Conservative Eglinton—Lawrence, ON
Mr. Chair, as I said, we have taken a number of steps to produce tax relief for Canadian businesses by reducing the general federal corporate tax to 15% from over 22%, eliminating the federal capital tax, reducing small business rates to 11%, and increasing the amount of eligible income for the lower rate to $400,000 in 2007 and then to $500,000 in 2009. We have increased the lifetime capital gains exemption for qualifying small businesses shares to $750,000. We have taken steps to reduce the compliance burden on businesses by reducing the frequency of various tax filings, eliminating retail sales taxes in Ontario and P.E.I. in harmonization with the—
Glenn Thibeault NDP Sudbury, ON
So the easy answer to that, Mr. Chair, was $225 million each year, but let us contrast that with the government's no-strings-attached corporate tax cuts. The estimate of that from the PBO is $1.85 billion. Therefore, it is $225 million to help the small businesses that are creating most of the jobs in this country or just giving a free-for-all of $1.85 billion to corporations.
Could the minister explain why the government is actually not supporting small businesses in Canada as it continues to cut any type of hiring credits and is not acting on any of the merchant fees? It is actually starting to get despicable.
The Assistant Deputy Chair Conservative Bruce Stanton
That will be the last question in that round.
The hon. minister.